Disclaimer: This has been reported after the availability of the order of the Court and not on media reports so as to give an accurate report to our readers.
Rouse Avenue Court, New Delhi: The present judgment dealing with alleged irregularities in the Delhi Excise Policy 2021-2022 (Delhi Excise Policy) to extend undue benefit to certain private persons/entities described as the “South Group” and allied intermediaries in consideration of illegal gratification quantified at approximately Rs 90—100 crores. While determining whether charges should be framed against the accused or whether they were entitled to discharge under the provisions of the Criminal Procedure Code, 1973 (CrPC), a Single Judge Bench of Jitendra Singh, J., discharged the accused A-1 to A-23 of all the offences alleged against them and held that material placed on record did not disclose even a prima facie case, much less any grave suspicion, against any of the accused persons.
Principles for appreciating prosecution material at the stage of charge
Appreciating prosecution material at stage of charge
The Court observed that before evaluating the allegations against each accused, it is necessary to recall the settled legal framework governing the appreciation of prosecution material at the stage of charge.
The Court observed that at the stage of consideration of charge, the Court is not required to undertake a detailed evaluation of the evidence as would be done during trial, but, the Court proceeds on the assumption that the prosecution material, as presented, is prima facie true, and the defence has not yet had the opportunity to test that material through cross-examination. The Court emphasised that the Judge cannot act merely as a “post office” or “mouthpiece of the prosecution” and must apply its judicial mind to the material on record to determine whether the material discloses the essential ingredients of the alleged offences.
The Court placed reliance on Sajjan Kumar v. CBI, (2010) 9 SCC 368, which authoritatively summarised the principles governing Sections 227 and 228 CrPC and established the settled position of law governing the stage of framing of charge.
Essence of test at the stage of charge
The Court observed that the essential question at this stage is whether the prosecution material, if taken at face value and accepted in its entirety, discloses a prima facie case giving rise to “grave suspicion.” If such grave suspicion exists, that would be sufficient for framing of charges. On the other hand, if the material discloses only a weak or speculative suspicion, the Court would be justified in discharging the accused. Thus, the Court’s inquiry at this stage is limited but meaningful, requiring application of judicial mind to the material placed on record.
The Court further referred to Tuhin Kumar Bishwas v. State of W.B., 2025 SCC OnLine SC 2604, where the Supreme Court reiterated that an accused may be discharged where there is no strong suspicion based on material capable of becoming admissible evidence during trial.
The Court explained that suspicion cannot rest upon conjecture, assumptions, or narrative convenience. Rather, the suspicion must arise from material that is capable of being proved as evidence in accordance with law.
The Court noted that the precedents referred collectively emphasised that the ground contemplated under Section 227 CrPC is not a ground for conviction but only a ground for putting the accused on trial.
The Court also relied on M.E. Shivalingamurthy v. CBI, (2020) 2 SCC 768, where the Supreme Court stated that
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“if two views are possible and one gives rise to suspicion only, as distinguished from grave suspicion, discharge is justified;
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the Court is not a mere post office;
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the Court sifts the statements/documents produced by the prosecution to see if there is sufficient ground to proceed;
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if the evidence proposed, even if fully accepted, cannot show commission of offence, there is no sufficient ground for trial; and
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there must exist some material for entertaining a strong suspicion which can form the basis for drawing up a charge.”
The Court emphasised that while the threshold at the stage of charge is not proof beyond reasonable doubt, but it must still be based upon material capable of supporting the allegation.
Documentary material: file notings and policy deliberations
The Court observed that a substantial portion of the prosecution case arises from policy decisions and administrative file notings. The Court explained the legal significance of such material and stated that file notings and internal deliberations within government departments are essentially records of internal discussion, consultation and evaluation.
“Criminal law cannot be invoked to revisit or punish administrative discretion, particularly when the record shows that the actions in question were confined to policy formulation and implementation undertaken in the ordinary course of governance.”
The Court held that the mere presence of file notings cannot be treated as evidence of criminal misconduct. The Court is required to see whether the documents relied upon, taken at face value, disclose the ingredients of the alleged offences, and whether there exists independent material pointing to mens rea, quid pro quo, or abuse of office, beyond mere administrative processing.
“While a detailed evaluation of evidence is impermissible at the stage of charge, it is equally true that where the case is predominantly documentary and rests substantially on internal notings and policy papers, the Court must undertake the limited scrutiny mandated by law to ensure that criminal process is not employed as a vehicle to challenge executive decisions under the guise of prosecution.”
Policy decisions: limits of criminal prosecution
The Court observed that policy decisions, relating to licensing, taxation, regulatory frameworks, privatisation, or commercial participation of private entities, are often taken with the objective of improving revenue or public welfare. Such decisions inevitably involve exercise of executive discretion. Therefore, the mere fact that private entities have earned profits under a particular policy framework cannot by itself justify criminal prosecution.
The Court noted that “economic and administrative decisions taken in good faith cannot be criminalised in the absence of clear prima facie material disclosing mala fides, quid pro quo, or abuse of office”. In the absence of such material, the matter remains within the domain of governance and policy-making rather than criminal adjudication.
The Court also referred to the institutional framework governing decision-making in the Government of the National Capital Territory of Delhi (GNCTD). This framework included the Transaction of Business of the GNCTD Rules, 1993, the Allocation of Business Rules, 1993, and the Central Secretariat Manual of Office Procedure. These rules regulate initiation of policy proposals, movement of files between departments, consultation with different authorities, and the manner in which decisions are recorded.
The Court observed that these instruments are designed to ensure administrative discipline and accountability, but they are not penal provisions. Consequently, even if there is deviation from prescribed administrative procedure, such deviation would ordinarily constitute an administrative lapse rather than a criminal offence, unless accompanied by material showing dishonest intent or corruption.
The Court emphasised on following broader principles that must guide judicial scrutiny in policy-related prosecutions —
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Policy formulation is inherently experimental, and failure of a policy cannot by itself indicate criminality.
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Profit earned by private entities is not illegal per se unless it is shown to arise from collusion or manipulation of the decision-making process.
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Administrative rules governing file movement are meant to ensure institutional discipline, not to create criminal liability for procedural deviations.
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Excessive criminalisation of policy decisions can paralyse governance, as officials may become reluctant to take bona fide decisions in public interest.
The Court therefore stresses that criminal liability requires clear prima facie material indicating dishonest intent.
Bribe/upfront/kickback allegations — What must prima facie appear
The Court stated that where the prosecution alleged that the formulation and implementation of the Delhi Excise Policy were influenced by payment of bribes, upfront money and kickbacks, the court must examine whether the prosecution material, even if accepted at face value, discloses certain essential elements. The Court identified the following requirements:
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There must be prima facie material indicating demand, arrangement or payment of illegal gratification.
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There must be a discernible quid pro quo, linking the alleged gratification to an official act.
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There must exist a nexus between the alleged payment and the policy provisions or administrative decisions.
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There must be material connecting the accused persons with the alleged influence or decision-making process, beyond mere assumptions arising from policy outcomes.
The Court emphasised that while file movement and administrative documentation may provide context, such material cannot substitute the requirement of prima facie evidence showing corrupt intent. In the absence of such linkage, a prosecution founded primarily upon administrative records risks converting policy review into criminal adjudication, which is impermissible.
Conspiracy in policy and economic cases — agreement as the core element
The Court next addressed the legal requirements for establishing criminal conspiracy under Section 120-B, Penal Code, 1860 (IPC), particularly in cases involving economic policy or regulatory reform. The Court recognised that direct evidence of conspiracy is rarely available, and therefore conspiracy is often inferred from surrounding circumstances. However, it emphasised that the absence of direct evidence does not dilute the legal threshold even at the stage of charge.
The Court stated that the prosecution must still place material on record which discloses grave suspicion of a conscious agreement between the accused persons to commit an illegal act or to achieve a lawful objective by illegal means.
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Requirement of “Meeting of Minds”
The Court reiterated that the gravamen of the offence under Section 120-B IPC lies in the agreement itself. Therefore, the prosecution must prima facie demonstrate — who entered into the agreement, with whom the agreement was made, what illegal act or unlawful objective was agreed upon, when the agreement arose, and how subsequent acts were performed in furtherance of that agreement.
The Court observed that economic gains or uneven commercial outcomes by themselves cannot constitute conspiracy. Similarly, the fact that certain private entities benefitted from a policy decision does not automatically establish the existence of a criminal agreement. The prosecution must show consensus ad idem, meaning a meeting of minds between the conspirators to pursue an unlawful objective.
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Risk of narrative-based prosecution
The Court cautioned that in cases involving complex policy decisions, the prosecution often attempts to present the facts as a “coherent and well-knitted narrative.” While such a narrative may appear persuasive at first glance, it emphasised that court must examine whether the narrative is supported by legally sustainable material.
The Court must guard against being influenced by the presentation of the narrative alone and must instead test whether the record discloses a consistent sequence of facts capable of establishing an offence.
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Circumstantial Evidence — requirement of a complete chain
The Court further observed that the prosecution in the present case relied substantially upon circumstantial evidence. In such situations, the established principles governing circumstantial proof must be borne in mind even at the preliminary stage. “Law mandates that —
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the circumstances relied upon must be fully established;
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they must be consistent only with the guilt of the accused;
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they must exclude every reasonable hypothesis of innocence; and
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the chain must be so complete as to leave no reasonable ground for a conclusion consistent with innocence.”
The Court emphasised that if the chain of circumstances appears incomplete, fragile or dependent upon conjectural inferences, the legal threshold for proceeding to trial would not be satisfied.
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Guarding against retrospective criminalisation
The Court reiterated that prosecutions arising from policy decisions require careful scrutiny because there is always a risk that policy outcomes may be retrospectively interpreted as criminal acts. The Court emphasised that unless the prosecution material demonstrates clear prima facie evidence of corrupt intent, quid pro quo or collusion, the matter remains within the domain of governance rather than criminal law.
“Policy outcomes often result from multi-tier institutional processes involving consultations, departmental inputs, Cabinet-level decisions, and statutory/constitutional oversight. Criminal law cannot be used to retrospectively criminalise policy choices or market consequences unless the prosecution is able to prima facie demonstrate a meeting of minds to subvert the policy framework for an unlawful purpose.”
Court’s Order
The Court observed that the prosecution case failed to disclose even the threshold of a prima facie suspicion, far less the “grave suspicion” required for proceeding further in a criminal trial.
The Court held that the material on record does not disclose even a prima facie case, much less any grave suspicion, against any of the accused persons and discharged Accused A-1 to A-23 of all the offences alleged against them.
Although all the accused are discharged, the Court considered it necessary to highlight certain important issues related to the exercise of jurisdiction at the stage of charge. Referring to Anand Rai v. State of M.P., 2026 SCC OnLine SC 187, the Court reiterated that no person should be compelled to undergo the ordeal of a criminal trial unless the material on record discloses the essential ingredients of the alleged offence.
The Court asserted that criminal proceedings impose serious strain, stigma and prolonged uncertainty upon the accused, and therefore courts must ensure that charges are not framed mechanically or merely by way of abundant caution. Where the material, even if taken at face value, fails to disclose the ingredients of an offence, the Court must clearly decline to subject the accused to trial.
[CBI v. Kuldeep Singh, CBI Case No. 56/2022, decided on 27-2-2026]